As global demand for electric vehicles (EVs) and lithium-ion batteries surges, companies across the battery supply chain are increasingly adopting vertically integrated “mine-to-market” strategies. This approach seeks to guarantee access to essential raw materials while improving profit margins. Recent findings from IDTechEx’s report, “Critical Battery Materials 2025–2035,” detail how various players within the battery value chain are expanding beyond their traditional operations in response to this dynamic market.
Historically, the battery industry has seen clear distinctions between mining and battery manufacturing; however, these boundaries are becoming increasingly blurred. Miners are venturing into downstream materials processing, while battery manufacturers and original equipment manufacturers (OEMs) are investing in upstream supply chains. Key materials such as lithium, nickel, copper, cobalt, and natural graphite are being actively secured by firms keen to mitigate the risks posed by supply constraints. Notably, lithium and cobalt are already exhibiting signs of limited availability, with nickel anticipated to follow suit in the near future.
The emphasis on securing a stable supply chain has spurred countries to reconsider their resources. For instance, Indonesia, the largest producer of nickel globally, is directing its focus on EV-related nickel processing over traditional uses, such as stainless steel production. This shift signifies a growing alignment between national interests and the burgeoning EV market.
Vertical integration is becoming a hallmark of success in this sector. Companies like Vulcan Energy Resources, which is innovatively producing battery-grade lithium from geothermal brines, and Nouveau Monde Graphite, which aims to supply anode materials directly to EV manufacturers, exemplify this trend. Additionally, PT Merdeka Battery Materials’ collaboration with CATL and GEM Co. highlights an active effort to expand integrated nickel operations in Indonesia, further solidifying the supply chain’s resilience.
The report notes, “Raw materials suppliers and miners are increasingly expanding their involvements in downstream materials processing for batteries.” This transition not only enhances value creation but also facilitates more direct connections between material suppliers and battery manufacturers. In this environment, companies are compelled to innovate, finding new ways to tackle sustainability challenges, including the emissions associated with various processing methods.
As the landscape evolves, deep-sea mining is being examined as a potential future source of critical battery materials, adding another layer of complexity to the security of supply chains. With environmental implications weighing heavily on this discourse, the industry must navigate the delicate balance between resource extraction and environmental stewardship.
Furthermore, the dominance of Chinese firms in the lithium-ion battery segment is a critical factor in assessing global supply dynamics. Currently, approximately 70% of battery cell production is concentrated in China, where the country’s companies control substantial portions of the lithium-ion value chain, encompassing anodes, cathodes, electrolytes, and more. This concentration has prompted regions like Europe and North America to bolster domestic supply chains. The U.S., for instance, has set a target of achieving 600 GWh of battery cell capacity by 2030, with aspirations to expand to 850 GWh by 2035. Such initiatives reflect a strategic shift aimed at reducing reliance on a single production hub and fostering regional independence.
In summary, the ongoing evolution of the battery supply chain demonstrates a robust response to growing market demands and supply risks. With a focus on vertical integration and the development of sustainable practices, companies are not only looking to enhance profitability but also to secure a stable and responsible future for the electric vehicle industry.
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Source: Noah Wire Services
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